Berghaus v. U.S. Bank

Rachel Berghaus (defendant) obtained an adjustable-rate mortgage loan from Decision One Mortgage, whose disclosure statement and loan note both clearly stated her initial 7.49% rate could rise as high as 13.49%; Decision One assigned the note to U.S. Bank (plaintiff). After Berghaus's rate rose to 12.625% and she stopped paying, the bank foreclosed, and Berghaus, time-barred from suing Decision One directly, counterclaimed against U.S. Bank as assignee, alleging Decision One had misrepresented the loan's actual terms in violation of the Truth in Lending Act. The trial court held TILA's safe-harbor provision protected U.S. Bank and granted it summary judgment.